Ill Company provides the following data for the year 2020: Cash sales - 500,000; Collection from customers -3,950,000; Increase in accounts receivable - 250,000; Decrease in notes receivable - 50,000; accounts receivable written off - 100,000; sales discounts - 200,000; and sales return and allowances - 70,000 (20,000 of which refunded to customers) What was the amount of gross sales for 2020? P5,020,000 P4,900,000 P4,500,000 d. P5,000,000

Ill Company provides the following data for the year 2020: Cash sales - 500,000; Collection from customers -3,950,000; Increase in accounts receivable - 250,000; Decrease in notes receivable - 50,000; accounts receivable written off - 100,000; sales discounts - 200,000; and sales return and allowances - 70,000 (20,000 of which refunded to customers) What was the amount of gross sales for 2020? P5,020,000 P4,900,000 P4,500,000 d. P5,000,000

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter3: Evaluation Of Financial Performance

Section: Chapter Questions

Problem 3P

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Starlight Enterprises has net credit sales for 2019 in the amount of $2,600,325, beginning accounts receivable balance of $844,260, and an ending accounts receivable balance of $604,930. Compute the accounts receivable turnover ratio and the number of days sales in receivables ratio for 2019 (round answers to two decimal places). What do the outcomes tell a potential investor about Starlight Enterprises if the industry average is 1.5 times and the number of days sales ratio is 175 days?
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